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SCOTT PAPER COMPANY v. PENNSYLVANIA PUBLIC UTILITY COMMISSION (05/17/89)

decided: May 17, 1989.

SCOTT PAPER COMPANY, PETITIONER,
v.
PENNSYLVANIA PUBLIC UTILITY COMMISSION, RESPONDENT



PETITION FOR REVIEW

COUNSEL

William T. Hawke, Malatesta, Hawke & McKeon, Harrisburg, Pennsylvania, and James A. Corrodi, Deputy Gen. Counsel & Staff Vice President, Philadelphia, for petitioner.

Daniel P. Delaney, Chief Counsel, Lee E. Morrison, Asst. Counsel, Bohdan R. Pankiw, Deputy Chief Counsel, for respondent.

Gerald Gornish, Wolf, Block, Schorr & Solis-Cohen, Philadelphia, for Philadelphia Elec. Co.

David Wersan, Office of Consumer Advocate, Harrisburg, Pennsylvania, and Phillip F. McClelland, for Consumer Advocate.

David Kleppinger, McNees, Wallace & Nurick, Harrisburg, for PAIEUG.

Crumlish, Jr., President Judge, and Craig, Doyle, Barry, Colins, Palladino and Smith, JJ.

Author: Colins

[ 126 Pa. Commw. Page 113]

Scott Paper Company (Scott) petitions for review of an Opinion and Order of the Pennsylvania Public Utility Commission (Commission) entered August 13, 1987. We vacate and remand.

The Rate Proceeding

On December 30, 1985, Philadelphia Electric Company (PECO), filed a tariff supplement (Supplement No. 18) to its existing electric tariff (Tariff Electric -- Pa. P.U.C. No. 26). This tariff supplement included an Auxiliary Service Rider, which contained proposed rates, terms and conditions of electric service to be provided by PECO to self-generating customers (i.e. customers who generate some or all of their own electrical requirements.)*fn1 Occidental Chemical Corporation

[ 126 Pa. Commw. Page 114]

(Occidental) filed a complaint against the proposed tariff and the Commission on February 20, 1986, entered an order suspending the effective date of the proposed Auxiliary Service Rider until June 27, 1986, in order to open an investigation into the reasonableness of its rates and provisions, as well as into the reasonableness of PECO's then existing Auxiliary Service Rider. Subsequent to the opening of this investigation Scott filed its complaint against the proposed tariff.*fn2

Evidentiary hearings were held before Administrative Law Judge (ALJ) Joseph Klavekorn on April 17 and 18, 1986. Expert testimony concerning the proposed rates and provisions contained in PECO's proposed Auxiliary Service Rider was presented by various complainants and intervenors, including Scott, Occidental, the OCA, Einstein, Penn, Amtrak, and the Trial Staff. The Trial Staff offered expert testimony that there should be a limit upon the number of hours of back-up power a self-generating customer could purchase at the back-up power rate when that power was supplied on a "firm" basis.*fn3 However, there was no evidence presented indicating that a similar limit or "cap" should be applied to back-up power taken on an "interruptible" basis. This limitation or "cap" would not be upon the amount of back-up power a qualifying facility could take, but instead, would be upon the amount of back-up power a qualifying facility could take at a certain rate. Once the limitation had been exceeded, back-up power purchased would be priced at supplementary power rates which are substantially higher than back-up power rates.

The parties' positions regarding what should be the appropriate rates, terms and conditions of auxiliary services,

[ 126 Pa. Commw. Page 115]

    including this back-up power use limitation, varied. However, in an attempt to resolve the myriad of issues and positions asserted, a number of the parties, including Scott, the OCA, Einstein, Penn, Amtrak, GEC, and the Trial Staff signed a "Stipulation Agreement" which represented a combination of the divergent positions taken. This Stipulation Agreement contained a limitation upon the amount of firm back-up power which could be taken by a qualifying facility at the back-up power rate, but no limitation upon the amount of interruptible back-up power which could be taken at the back-up power rate. Occidental and PAIEUG disagreed with certain aspects of the Stipulation Agreement and PECO opposed it entirely.

Briefs and reply briefs were filed and on May 22, 1986, the ALJ issued a Recommended Decision wherein he recommended that PECO's proposed Supplement No. 18 not be permitted to go into effect. He found that the proposed Supplement No. 18, in addition to PECO's then existing Auxiliary Service Rider contained rates which were "fatally flawed by the failure of the company to recognize that the costs imposed on the PECO system by back-up and maintenance power customers are not the same as the costs imposed by full requirements customers." (Reproduced Record (RR) at 112a.) The ALJ found that the Stipulation Agreement, with some minor modifications, set forth rates and terms which represented the best resolution of the issues. Accordingly, he recommended that the Commission adopt the Stipulation Agreement, as modified, and direct PECO to file tariff supplements for auxiliary services prepared in accordance with his Recommended Decision.

Upon review of the ALJ's Recommended Decision, the Commission entered an Opinion and Order on October 9, 1986 (rate case order), adopting that decision with certain specifically noted modifications not involving the firm back-up power limitation. The rate case order directed PECO to file a tariff or ...


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